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CU praises proposed essential health benefits rules

Friday, December 21, 2012

Consumers Union Praises Proposed Essential Health Benefits Rules, But Warns Against Benefit Substitution Flexibility
WASHINGTON, D.C. – In comments filed today with the U.S. Department of Health and Human Services (HHS), Consumers Union, the policy arm of Consumer Reports, praised the proposed rules that will provide consistent standards for measuring coverage and making it easier for consumers to compare health plan options. The group commended the robust standards for measuring health plan value, but warned regulators about giving insurers too much flexibility when it comes to benefit substitutions.

“We are pleased that the rules will ensure that consumers have a common yardstick to measure the generosity of coverage of different plans,” said Lynn Quincy, senior health policy analyst for Consumers Union. “For consumers who can’t get health insurance through their employer, having these uniform standards will help them navigate their new improved health plan options in 2014 and beyond.”

While the group praised the use of a single actuarial value calculator, they recommended changes be made to the calculator to make it more robust. Notably, the comments urged using a single, standard population rather than the proposed four populations reflecting different levels of healthcare spending.

Quincy said, “The goal of the actuarial value calculator is to reveal differences in health plan cost-sharing, while holding everything else constant. For this type of estimation, it is appropriate to use a single standard population so that cost-sharing differences aren’t obscured by underlying differences in the population using services.”

Consumers Union also warned about the number of benefit substitutions that insurers could make, recommending that this be minimized to ensure that the benefits remained “substantially equal” to the benchmark plan, as required by law. The group suggested finding a way to make these substitutions more obvious to consumers, such as highlighting how the plan varies from the benchmark plan in the Summary of Benefits and Coverage form.

“The fact that there is no standard way to account for these substitutions could undermine the gain that consumers get with a standardized actuarial value,” said Quincy. “We strongly recommend developing a way to measure substitutions using a common standard, as has been done for cost sharing. Furthermore, HHS must establish a line that makes it clear when the extent of substitutions means a plan is no longer ‘substantially equivalent’ to the benchmark plan.”

A copy of the full comments can be found at:

Contact: Michael McCauley, mmccauley@consumer.org or 415-431-6747, ext 126